How the ‘startup nation’ develops its workforce

Por • 26 sep, 2022 • Sección: Educacion

By Henry Kressel

September 16, 2022. A recent op-ed piece in the Wall Street Journal, “Higher Ed Can Redisdcover its Purpose,” critiques US colleges’ shortcomings in training students for market needs, saying they ” will need to become intentional about the education they are providing and about the students for whom they are providing.”

In this regard there is much to be learned from the tertiary educational system in Israel, which has been remarkably successful in helping to build dynamic industry.

With a population of about nine million people, Israel has become known as a “startup nation” because of its success in developing a rapidly growing economy aided by innovative new-technology companies. Many of these new companies have become successful internationally.

Many factors contribute to this success but the government-funded tertiary educational system in Israel is a key factor that trains the skilled people needed to staff successful companies.

In contrast to the US, where students enter college after high school at 18, Israeli students start military service then. They resume their studies afterward at age 21 or 22 . Seeking to focus on career objectives, they are ready to forgo the general studies and recreational activities that are part of the US college experience.

That means that educational institutions must focus on serious academic programs that enable their graduates to start their careers at graduation.

Israel recognizes that education is key to building an economy and sees it as the responsibility of the national government to fund educational institutions (with modest tuition required from students).

A key decision was to divide the missions of academic institutions into two groups. Eight universities are funded as doctoral-degree-granting and in addition receive funding for faculty-conducted research. Twenty colleges receive funding only for educating students to the bachelor’s degree level in three years. The funding they receive is on a per-student basis. (Some of the 20 colleges offer also master’s degrees.)

Through the college system, the government addresses the perceived need for adjusting enrollment and degree-granting to the training deemed necessary to meet employment market needs.

Hence every five years the government agencies managing academic funding assess the expected employment needs, and the funding provided is scaled accordingly. Currently, for example, engineering and computer science are favored disciplines.

The percentage of the population between the ages of 25  to  45 with tertiary education is in the 45% range – comparable to the percentage in many advanced economies. With well-focused professional training, Israel has been able to develop a growing technology industry on the basis of a trained workforce.

From personal experience in investments in Israel, I have found that levels of productivity and quality of work compare favorably with those of US or EU engineers in comparable jobs.

A good indicator of the quality of local talent is that Israel has been able to attract foreign companies that establish engineering centers in the country – Microsoft and Google, for example. And, while many local startups move staff overseas, the common Israeli practice is to keep technology development at home.

What can we learn from the Israeli system that would be applicable in the US?

The Israeli tertiary educational system is obviously very different from the US one where the typical four-year college training is provided by thousands of private and state-supported institutions including specialized ones (such as engineering schools) and others providing general education in the liberal arts.

The US environment has the advantage of offering broad educational opportunities. But, the system leaves many students at the end of four years with few if any marketable skills because they are poorly prepared for good jobs in an economy increasingly technological in nature. Change is needed to make post-high school education more relevant to market needs for many young people who can benefit from specialized training.  

A good place to start would be for US states to divide public tertiary academic funds in a manner similar to that adopted in Israel. In parallel with the current broad discipline universities, colleges (either two-year or four-year programs)  should be funded with specific disciplines as primary teaching institutions.

Coursework would emphasize the core discipline with other courses to prepare students for the changing industrial environment that they will face. Helping to prepare the students, accommodations should be made for them to work part-time in local industry during the school year as well as during summers.  

Finding faculty is a challenge. In Israel, part-time teachers complement full-time ones and are recruited with the aid of industrial corporations that benefit from collaboration with colleges as sources of skilled employees.

A more focused career training education is called for. The right resources need to be applied and the best place to start is at the state level where educational budgets already exist.

Henry Kressel is a technologist, inventor and long-term private equity investor.

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